Sunday 25 September 2016

Crisis of trust as EU turns the screw

Greek talks stall, but will recovene today as Taoiseach on standby to travel for emergency EU gathering

Published 12/07/2015 | 02:30

Michael Noonan was hopeful that a deal could be found but warned that the Greek Government must deliver quickly on its pledge to implement a suite of austerity measures
Michael Noonan was hopeful that a deal could be found but warned that the Greek Government must deliver quickly on its pledge to implement a suite of austerity measures

Crucial talks aimed at securing a Greek bailout appear to have dramatically stalled in a major setback for the eurozone.

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Eurozone finance ministers have struggled to find common ground during emergency talks in Brussels, sources said last night.

It's understood that the Finnish government is resisting many of the proposals aimed at delivering a deal for embattled Greece after significant concerns were raised domestically.

A report in Finland said the country's government was close to collapse over the prospect of the eurozone accepting a new deal

Germany too was hostile in yesterday's talks as reports emerged that the country's Finance minister Wolfgang Schauble wants Greece to exit the euro for five years and be given a humanitarian aid package.

During a dramatic day of negotiations, several ministers spoke of a lack of trust with the Greek government, led by Prime Minister Alexis Tsipras.

Michael Noonan was hopeful that a deal could be found but warned that the Greek Government must deliver quickly on its pledge to implement a suite of austerity measures.

As ministers convened for dinner after 7pm, it seemed likely that a deal could be reached.

But a source told the Sunday Independent that ministers have struggled to find "common ground".

It's understood that Finland is central to the opposition due to concerns raised domestically.

It's now likely that an emergency summit of the heads of States will be convened later today. EU prime ministers, including Taoiseach Enda Kenny, remain on standby for an emergency summit later today.

The mood among officials in Brussels was upbeat earlier yesterday after the Greek parliament passed proposals to implement a suite of reforms on Friday night.

But several finance ministers, including Michael Noonan, warned Greece that it must rebuild trust with other eurozone countries if a rescue deal is to be put in place.

While Mr Noonan sounded optimistic about the prospect of a deal being struck, he called on Greek prime minister Alexis Tsipras and his colleagues to implement the reform package immediately.

"A lot of people today will be concerned as well that the Greeks should move and start implementing measures immediately, because the parliamentary majority of the government now in Athens is being eroded, and they may not have the capacity to implement the measures they have agreed as time goes by," Mr Noonan told reporters.

"To get back to your trust question, it would certainly build up trust if they stayed in parliament next week and the week after and start implementing, by way of legislation, what they have now agreed to support," he added.

In Brussels, it was clear that the strongest level of resistance towards the Greek proposals came from Germany.

In a clear swipe at the Syriza-led government, German finance minister Wolfgang Schauble told reporters: "We will definitely not be able to rely on promises."

On the issue of Ireland's contribution to a bailout fund, Mr Noonan said it would be through the European Stability Mechanism, and therefore, would have have no impact on the upcoming budget.

"But since the funds will be drawn down principally from the ESM, and we already have contributed to the ESM, and will continue to do so on an annual basis, whatever the Irish liability is, it won't have an immediate budget impact."

Sunday Independent

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